Background

The Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (AML/CFT Act) requires reporting entities to detect and deter money laundering and terrorism financing. The AML/CFT Act captures activities commonly provided by accountants, lawyers, and real estate agents, involving client assets. Businesses undertaking these activities are 'reporting entities' and must comply with the AML/CFT regime.

In October 2024, Associate Minister of Justice, Hon Nicole McKee, announced an overhaul to make the AML/CTF regime more agile and responsive. This includes a single-supervisor model and a co-funding model with a levy on reporting entities.

Scope

A reporting entity is any person providing captured services. For accounting practices, you are a reporting entity if you carry out activities defined under "designated non-financial business or profession" in section 5(1) of the AML/CFT Act.

Obligations

• Enrol with the Department of Internal Affairs (DIA).
• Appoint a Compliance Officer to administer your AML/CFT program.
• Conduct a risk assessment to identify and assess the risk of money laundering and terrorism financing (ML/TF).
• Establish an AML/CFT program based on your risk assessment.
• Conduct customer due diligence (CDD) relative to the ML/TF risk of your client.
• Report suspicious activities to the New Zealand Police's Financial Intelligence Unit (FIU).
• Report prescribed transactions (domestic cash transactions of $10,000 or more and 
• international wire transfers of $1,000 or more) to the FIU.
• Submit an annual report to your AML/CFT supervisor.
• Have your risk assessment and AML/CFT program audited every three years.

Supervision

New Zealand currently follows a multi-agency supervision model. The DIA supervises accountants, lawyers, real estate agents, and other reporting entities. The government plans to move to a single-supervisor model by mid-2026, with the DIA as the sole supervisor.

Penalties

A reporting entity that commits an offence under the Act is liable, if convicted, to a fine of up to $5 million.

An individual who commits an offence under the Act is liable, if convicted, to up to two years imprisonment and a fine of up to $300,000.

Resources

The DIA provides resources, including an Accountants Guideline, to help accountants comply with the AML/CFT Act. CA ANZ also offers guides for New Zealand members, accessible via the sidebar.

Tax transfers

CA ANZ applied for an exemption for tax transfers.

The Associate Minister of Justice granted an exemption for most types of tax transfers until 14 July 2027.

The exemption and the specific tax transfers covered are explained in DIA’s Tax transfers class exemption.